Many governments around the world attempt to improve the incomes of commodity producers by taking steps to increase the commodity price in the domestic market
Although this may reduce quantity demanded for the product, the action may be effective because: A) commodity supply tends to be inelastic, so quantity does not decline by much.
B) commodity supply tends to be elastic, so producer income increases as a result of the higher prices and quantities.
C) commodity demand tends to be inelastic, so higher prices generate higher sales revenue.
D) commodity supply tends to be elastic, so producer income increases as a result of the higher prices and quantities.
C
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Sadie is getting ready to go to work where she earns $70 a day as a day laborer. Her friend Caroline calls her and asks her to go swimming with sharks for the day. Sadie decides to go with her. Sadie's choice implies that her opportunity cost of working is:
A. less than $70. B. greater than $70. C. equal to $70. D. Cannot say without more information.
Steel producers lobbying to keep imports out is an example of:
A. objective cost-benefit analysis. B. rent-seeking behavior. C. rational ignorance. D. corruption.
When revenue is less than total cost but more than variable cost it implies that:
a. the firm is enjoying positive economic profits. b. the firm is earning normal profits. c. the firm can cover its variable cost and a part of its fixed costs. d. the firm is unable to cover its costs and should shut down. e. the firm is able to cover both its fixed and variable costs.
Sensitivity analysis is restricted to natural sciences.
Answer the following statement true (T) or false (F)